Olav Thon Eiendom (OLT) Q3 2024 earnings summary

Executive summary

• Q3 2024 profit before tax was MNOK 502, a significant turnaround from a loss of MNOK 763 in Q3 2023, driven by stable rental income and property values.

• Financial position remains solid with an equity ratio of 51% and liquidity reserves of MNOK 9,221.

• Share return over the last 12 months was 41%, with NOK 60 increase in share price and NOK 7 dividend.

• Retail sales in shopping centers increased by 1.0% in Q3 2024 and 2.8% year-over-year, reaching NOK 14,597 million.

• Fair value adjustments in investment properties and derivatives totaled NOK 48 million, compared to NOK -1,332 million last year.

Financial highlights

• Gross rental income for Q3 2024 was MNOK 946, up from MNOK 922 in Q3 2023 and MNOK 944 in Q2 2024.

• Net rental income for Q3 was NOK 831 million, compared to NOK 825 million last year.

• Profit before tax, fair value adjustments, and currency result was MNOK 518 in Q3 2024, down from MNOK 541 in Q3 2023.

• Net interest expenses increased to MNOK 812 for the nine months, up from MNOK 739 year-over-year.

• Market value of properties at quarter-end was NOK 57,052 million, with an average yield of 6.1%.

Outlook and guidance

• Solid market position and strong financials expected to support continued operational performance despite higher interest rates and macroeconomic uncertainty.

• High liquidity and low leverage provide opportunities to pursue attractive investments.

• Dividend policy targets annual payout of 30-40% of profit (excluding value changes); NOK 7 per share paid for 2023.

• Norges Bank's policy rate is expected to remain at 4.50% through the year.

• Persistent inflation and geopolitical uncertainty contribute to a cautious outlook.